Looks like Great Crash 2 just kicked up another gear. The VIs now ADMIT its slowing and are looking at ways to unload the unsold and overpriced stock or there will be no commissions to pay their oversized bills.

Looks like Great Crash 2 just kicked up another gear. The VIs now ADMIT its slowing and are looking at ways to unload the unsold and overpriced stock or there will be no commissions to pay their oversized bills.

A few suggestions to combat the dying market:

1. Reduce prices.

2. Reduce prices.

3. Reduce prices by a lot.

RB, I'm a little naive about how price reductions actually work 'on the ground'. As far as I understand, it’s down to how the relationship works between seller, buyers and EAs.

Who has the most power to influence prices here? Does it start with buyers putting in low offers and then not raising them?

Hope someone can enlighten me because it is this aspect that is key to a crash happening?

2. Sellers are forced to lower prices because they are overgeared or facing some other economic disaster such as job loss. In a recession jobs losses add a great deal of momentum to a downturn in house prices.

3. Perception changes to the point that the consensus no longer believes house prices will rise--we are at that point now as VIs begin to admit its over. Buyers then decide to "wait it out" knowing that prices are no longer rising they are more content to rent and wait for prices to crash. This in turn triggers more STRing and BTLers bailing thereby adding to the supply side of the equation.

4. Stock market collapses can speed the process along considerably as the feeling of being "wealthy" vanishes and the knock-on effect on key City of London jobs impacts the entire economy blackening overall mood.

5. The power to influence markets is therefore with the market overall. On a much more more superficial level, The Sun has the power to cause the herd to stampede as it is the conscience of the people in the UK.

IMO the market hit a significant turning point by the end of Q2 2007 although all the "news" is coming out this Q. I can see the 4th Q as being very dire indeed.

2. Sellers are forced to lower prices because they are overgeared or facing some other economic disaster such as job loss. In a recession jobs losses add a great deal of momentum to a downturn in house prices.

3. Perception changes to the point that the consensus no longer believes house prices will rise--we are at that point now as VIs begin to admit its over. Buyers then decide to "wait it out" knowing that prices are no longer rising they are more content to rent and wait for prices to crash. This in turn triggers more STRing and BTLers bailing thereby adding to the supply side of the equation.

4. Stock market collapses can speed the process along considerably as the feeling of being "wealthy" vanishes and the knock-on effect on key City of London jobs impacts the entire economy blackening overall mood.

5. The power to influence markets is therefore with the market overall. On a much more more superficial level, The Sun has the power to cause the herd to stampede as it is the conscience of the people in the UK.

All of these are true, but some are much more significant than others.

1. Critical, the "affordability" argument, and in my view one of the two key triggers that will force a drop in UK house prices over the next two years.

2. Critical in the 1989-95 crash but less important today, we'd need another half million unemployed to make this a significant factor.

3. Critical, this is the second trigger, it will drive new BTL landlords to flee the market and make the UK BTL industry a net seller of property, as against the net buyer that it's been for the last five years.

4. Unimportant in the UK, not enough people are direct stock market investors and it's a myth that city bonuses are dependent on rising share prices. If a stock market crash caused the MPC to reduce or hold interest rates then it would actually be counter productive.